Foxconn Q2 revenue beats market forecast on high demand for AI servers
“As we enter the peak season of the second half of the year, we expect our operation to gradually gain momentum,” the message said. Photo: Shutterstock
Taiwan’s Foxconn, the world’s largest contract electronics maker and Apple’s biggest iPhone assembler, on Friday reported better-than-expected quarterly revenue from demand for AI servers and forecast continued growth in the current quarter.
The third quarter traditionally marks the start of the season for Taiwanese tech companies to supply smartphones, tablets and other electronics to major suppliers such as Apple ahead of the year-end holiday season in Western markets.
Foxconn is also making progress on the back of strong demand for servers for artificial intelligence (AI) applications. One of Foxconn’s customers is AI darling Nvidia.
Foxconn said in a statement that revenue in the third quarter of this year is expected to increase both year-on-year and compared to the previous quarter.
“As the peak season begins in the second half of the year, we expect our operations to gradually gain momentum,” the company said.
The company does not provide a numerical forecast.
Foxconn, formally known as Hon Hai Precision Industry Co Ltd, reported revenue of T$490.7 billion ($15.12 billion) last month, up 16.1% year-on-year and the second-highest level for the same period.
In the second quarter, revenue rose 19.1% year-on-year to T$1.55 trillion, surpassing the T$1.51 trillion LSEG SmartEstimate, which gives more weight to analysts’ forecasts that are consistently more accurate, and a record high for the same period.
Second-quarter revenue from the cloud and networking products segment showed strong growth year-on-year and quarter-on-quarter, driven by strong demand for AI servers, the company said.
However, Foxconn said sales of smart consumer electronics, including smartphones, remained flat year-on-year, without providing an explanation.
Foxconn shares have risen 105% so far this year, outpacing the broader Taiwanese market’s 31% gain.
In line with the broader market, Foxconn shares closed flat on Friday ahead of the release of its revenue figures.
The company is scheduled to report second-quarter earnings on August 14.
First print: 05 Jul 2024 | 23:32 IST